Why strata levies need their own meerkats

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Among the many benefits of the internet, comparison websites seem to get a fair old workout, and from users of all ages and backgrounds.

You know the things I mean, promoted by those deeply annoying meerkats on the “Compare the Market” TV ads that seem to have taken on a life of their own.

Whether you are buying a car or booking a holiday, choosing a new credit card or looking for a mortgage, there will be a site inviting you to define your specific  preferences to find the best deal.

And then there are those run by mortgage lenders where you input the amount of the loan you want, the number of years you want it for, and whether it’s weekly or monthly payments.

The computer immediately comes up with a figure to tell you if you are on the money or dreaming, sending you back to a similar property search site where you plug in a modified version of your priorities, hoping to find an apartment you can afford.

With all that sophisticated computing going on, there is one area that could definitely use such a service: how do you tell if a property’s levies (fees) are too high or too low?

Strata levies are calculated when the budget for your building is set at the AGM, and then divided up based on the unit entitlements of different apartments or townhouses. Those unit entitlements are very, very roughly based on the value of your apartment.

The problem with comparing apartments or apartment blocks, to establish whether the levies are too high or too low, is that every strata scheme is different, and in so many ways.

How many units does it have, how old is it, how many lifts, is there a swimming pool, is it heated, is there a strata manager, a building manager, a maintenance program, a lot of internal lighting, solar power?

Has it been involved in expensive legal battles? Is there a significant number of short-term holiday lets leading to additional wear and tear?

Wouldn’t it be great if you could tick a few boxes online and be given a benchmark rating on whether the levies were likely to be high, low or pretty much on the money?

Can levies be too low? Yes, indeed.  Excessively low levies can be an indication that the building is badly managed, with the owners avoiding maintenance, either directly or through the capital works (sinking) fund, presumably in the hope that they can leave the cost of maintenance and repairs to the next bunch of owners.

Back to the strata data. If only there was a group or body that had all that information for all the apartment blocks in Australia.

Then some geeks could punch the info into a program that would generate a table that you and I could consult when we were looking at our own levies, or maybe the levies on a prospective purchase, to see if they were in the right ballpark or either way too high or far too low.

You would go to the website, type in the number of units, the facilities, the age of the building and all the other relevant factors and find out immediately if a block was overspending or undercharging.

But where could you possibly find all this invaluable but disparate information? Actually, the nation’s strata managers would already have all that data on their computer systems.

And Strata Community Australia (SCA), the strata managers’ professional body, is the organisation best placed to oversee this.

Okay, there would be a cost. So maybe it needs a government incentive to do some serious data mining.

Meanwhile, all we can do is scour the internet for buildings of a similar size, age and with comparable facilities, and hope their levies aren’t as far out of kilter as ours.

A version of this column first appeared in the Australian Financial Review.

 

2 Replies to “Why strata levies need their own meerkats”

  1. Avatar Jimmy-T says:

    This is now being discussed in the Flat Chat Forum

  2. Avatar Arnie says:

    Such a site already exists – I used it just a few weeks ago.

    I am in no way associated with it, but given your comments above, you may be interested in it: strataoptions.com.au

    Who knows – it may provide you with some material for another article. 🙂

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